Europe’s Debt Crisis: 5 Things You Need to Know

NEW YORK (CNNMoney) — It’s been about 18 months since the sovereign debt crisis in Europe began attracting attention in global financial circles.

In that time, the crisis has grown into the biggest challenge the European Union has faced since the adoption of the euro as its single currency 12 years ago.

Greece, Portugal and Ireland are on life support. Italy and Spain are exhibiting worrying symptoms. Germany and France, the healthy ones, are suffering from a global economic malaise.

As the situation appears to be coming to a head, again, here are five key issues to keep an eye on.

1. Stability fund is not very stable

In July, European political leaders announced a set of proposals to address the crisis, including a second bailout for Greece, which was teetering on the verge of default.

The centerpiece of the agreement was the proposed reform of the European Financial Stability Fund. The fund was set up last year to facilitate low-cost loans for struggling EU members including Portugal and Ireland.

Under the proposed reforms, the €440 billion fund would be able to buy bonds issued by distressed euro area governments directly from investors in the secondary market.